Investing in the FTSE 100 (Updated 2018)

We were recently talking with our British friends and they started to give us some background on the investments that they choose to make. It was hard enough for us to invest in something closer to home as opposed to investing in something in a different country, however it is not that difficult.

£100 invested in the UK stock market in 1945 would be worth £180,000 today — even after inflation

The best way to invest in any stock market is to pick a small handful of solid companies and slowly invest more over time. As this is the FTSE 100, it means that these are the biggest 100 on the UK Stock Exchange.
Example
Over five years, Royal Dutch Shell covering the worst oil price crisis we’ve had in decades, Shell shares have actually risen by 16% and have paid an annual dividend averaging around 6%. If you’d reinvested your dividends each year, you’d be sitting on a five-year return of more than 50%. Shell can be a great investment for anyone.

If you’d reinvested your dividends each year, you’d be sitting on a five-year return of more than 50%. Shell can be a great investment for anyone.

It is important to note that investing in the stock market is a long term strategy, very rarely are huge gains made overnight, it is a gradual increase or decrease. When you begin investing it is all amount getting rewards for your invested cash, whether that is growth or dividends, at this point it time both equal success. To grow your capital, you can just buy more shares with any dividends received. Many companies will let you take new shares directly instead of cash, referred to as scrip.
As with all investment strategies, the idea is to diversify and help reduce risk by spreading money across sectors. However don’t buy too many different shares otherwise the reuslts will be minimized.

As with all investment strategies, the idea is to diversify and help reduce risk by spreading money across sectors.

How Much to Invest

HSBC is the second biggest company listed on the exchange and over the past 5 years has provide similar returns to Shell for the Investors. We started slow with our investments, initially placing in £500

The important tip with investment is to only place investments that you can afford, there is also the possibility that share prices decrease rather than increase. Save your cash and invest when you can.

Investing in FTSE 100

There is nothing difficult in investing in the FTSE 100 so don’t be put off by the investment language used online and offline. The market reports are too be taken as an overlook. There are common sense recommendations that we can advise which we will be listing in due course. Start small on your journey to financial freedom which we all aspire to be.

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Nicole’s Nickels aims to bring exciting and interesting articles related to frugal living and personal finance. From money-saving tips to which investment opportunities to look for we aim to help you take control of your finances.

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Nicole’s Nickels aims to bring exciting and interesting articles related to frugal living and personal finance. From money-saving tips to which investment opportunities to look for we aim to help you take control of your finances.